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Related Person - GST Ready Reckoner - GSTExtract For the purposes of GST Related Person define under explanation to section 15 of CGST Act 2017 Related Persons Means (i) persons shall be deemed to be related persons if (i) such persons are officers or directors of one another s businesses; (ii) such persons are legally recognised partners in business; (iii) such persons are employer and employee; - As per Para 1 of Schedule III of CGST Act 2017, Services by an employee to the employer in the course of or in relation to his employment does not treat as supply. Refer some case laws . (iv) any person directly or indirectly owns, controls or holds 25% or more of the outstanding voting stock or shares of both of them; (v) one of them directly or indirectly controls the other; (vi) both of them are directly or indirectly controlled by a third person; (vii) together they directly or indirectly control a third person; or (viii) they are members of the same family [ define u/s 2(49) of CGST Act, 2017]; (ii) persons who are associated in the business of one another in that one is the sole agent or sole distributor or sole concessionaire , howsoever described, of the other, shall be deemed to be related. (iii) the term person also includes legal persons; Example: Q Ltd. has a deciding role in corporate policy, operations management, and quality control of R Ltd. It can be said that Q Ltd. controls R Ltd. Thus, Q Ltd. R Ltd. are related. B holds 30% shares of ABC Ltd and 35% shares of XYZ Ltd. ABC and XYZ Ltd. are related.
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